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TMI Blog1996 (10) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... ere it was detained for further enquiry into genuineness of the consignor and the consignees. A letter dated May 15, 1996 was sent to the Commissioner, Sales Tax, Enforcement Branch, Delhi to find out as to whether there existed any trading company in the name and style of M/s. Shiva Trading Company, the consignorcompany, and also whether the S.T. No. LC/32/16/7033/1293 as given in the bills was a genuine S.T. form. In its reply dated May 16, 1996, the Commissioner, Sales Tax, Delhi, gave the information that this ST No. 16/7033 had been issued by the department to M/s. AKG Gears (P) Ltd., 4/7, Pusa Road, New Delhi, vide LC-44/167033/0693. The goods which were being sent through this vehicle belonged to two consignees, namely, M/s. Suraj Enterprises of Sarkhej and M/s. Babulal Nandlal of Sarkhej. The department also enquired as to whether there existed these two consignee-firms at Sarkhej in Ahmedabad. For this purpose, letters were sent at the addresses contained in the bills, but the letters returned unserved. Details of the goods together with their price and other relevant information are given as hereunder: S. No. GR No. date Name of consignor Nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to the quantity of goods, their price and other particulars are given in the tabular form as hereunder: S. No. GR No. date Name of consignor Name of consignee Price of goods 1. 66617 11-5-1996 Shiva Trading Co., Delhi. Radha Sales Corp. Sarkhej. 1,04,500 2. 66621 11-5-1996 Do. Do. 1,05,000 7. The respondent made the impugned order on May 25, 1996 thereby imposing penalty of Rs. 2,70,000 calculated at the rate of 30 per cent on the goods valued at Rs. 9,00,000. 8. We have heard the arguments and given our careful consideration to the material on record. 9. The pleadings of the parties and the rival contentions raised on their behalf necessitated consideration of the following points: (1) Whether CTO, Flying Squad, Alwar, on May 14, 1996 had jurisdiction to intercept and check the trucks together with the goods loaded on them in view of the provisions contained in section 78 of the Act. (2) Whether the respondent had the jurisdiction to pass the impugned orders under section 78 of the Act. (3) Whether CTO, Flying Squad, Alwar, acted in violation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of the guidelines contained in the circular dated October 11, 1995. (4) Whether an appropriate enquiry was held by the respondent before the impugned orders were passed. (5) Whether transfer of the file from CTO, Flying Squad, Alwar, to the respondent made on May 22, 1996 was in violation of the provisions contained in section 41 of the Act. Points Nos. (1) and (2): 10. Since both these points are inextricably linked with each other, we consider it proper to dispose of them at one place. The learned counsel for the applicants has contended before us that there was violation not only of the provisions of section 78 of the Act but also of the provisions contained in the rule 53 of the Rajasthan Sales Tax Rules, 1995 (for short the Rules ). He has also drawn our attention to the provisions of section 2(22) of the Act to show that the petitioners were not the importers of the goods into Rajasthan and for that matter, the goods could not be checked by the authorities. A conjoint reading, so he contends, of the provisions contained in sections 2(22), 78 of the Act and rule 53 of the Rules goes to show that the checking was done and the impugned orders passed without authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atis mutandis apply. (4) Where any goods in movement, other than exempted goods are without documents, or are not supported by documents as referred to in sub-section (2), or documents produced appear false or forged, the in-charge of the check-post or the officer empowered under sub-section (3), may- (a) direct the driver or the person in-charge of the vehicle or carrier or of the goods not to part with the goods in any manner including by retransporting or rebooking, till a verification is done or an enquiry is made, which shall not take more than seven days; (b) seize the goods for reasons to be recorded in writing and shall give a receipt of the goods to the person from whose possession or control they are seized; (c) release the goods seized in clause (b) to the owner of the goods or to anybody else duly authorised by such owner, during the course of the proceeding if the adequate security of the amount equal to the estimated value of the goods is furnished. (5) The in-charge of the check-post or the officer empowered under subsection (3), after having given the person in-charge of the goods a reasonable opportunity of being heard and after having held such enquiry a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who receives any goods consigned to him from outside the State for sale, shall furnish or cause to be furnished a declaration in form S.T. 18A, if such goods are notified by the State Government. The counterfoil of the declaration shall be retained by such dealer and its portions marked original and duplicate shall be produced before the in-charge of the entry check-post/ officers empowered under section 78, who shall retain the original portion and return the duplicate portion after marking seal in token of having verified it, to the person producing it, and such officers shall send the retained original portion of the form S.T. 18A to the assessing authority of the dealer. 11.. Before we deal with the legal points, we consider it proper to examine the factual aspects of the case with regard to the genuineness of the documents as also consignor and the consignee-firms. It has been alleged in both the applications that the consignor was M/s. Shiva Trading Company, Delhi. On enquiry it transpired that this trading company was non-existent. In other words, it was a fictitious trading company which existed only on paper. The registration certificate number which was given in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e month of September, 1996 contains an allegation that the consignee-firms ordered the purchase of goods through a broker by name M/s. Ratan Trading Co. The name of this broker, M/s. Ratan Trading Co., appears for the first time in paragraph 5 of the rejoinder. Does it mean that the applicants had no knowledge about the existence of this broker, Ratan Trading Company, or about the trading activities which took place between the broker company on the one hand and the consignee-firms on the other. The name of the broker has been introduced at a very later stage with a view to create evidence in support of the allegations contained in the applications. M/s. Diamond Transport Service, Delhi, accepted the consignments for their delivery to the consignee-firms at Ahmedabad from M/s. Shiva Trading Company. This transport company may have the knowledge about the existence and whereabouts of the Shiva Trading Company, but until today it had kept enigmatic and studied silence about its existence. In view of these facts we come to the conclusion that the documents which accompanied the goods were false and which were forged with a view to defrauding the department of the amount of tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in writing. Sub-section (5) provides the procedure for the imposition of the penalty which can be done by the officers empowered in this behalf. Before the penalty can be imposed, an enquiry should be held wherein a reasonable opportunity of being heard is to be given to the person proceeded against. A careful reading of these provisions of section 78 goes to show that the goods in movement in the territory of the State of Rajasthan can be inspected and checked by the person in-charge of the check-post or the officer empowered by the State Government in this behalf and where the documents are not produced or are not in order or are false or forged, penalty can be imposed upon the person in-charge of the goods after an enquiry in which a reasonable opportunity of being heard shall be given to such person. In the case in hand the penalty was imposed upon the drivers who were in-charge of the vehicles when the checking was done. Notices were issued to the drivers to show cause as to why penalty should not be imposed upon them for the production of the documents which were false, and were forged with a view to avoid or evade the payment of tax. Later Shri G.L. Sharma appeared on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst them. 17.. The entire case of the applicants has been found to be a bundle of falsehoods. Before we part with this judgment we think it proper to make a reference to one more fact with regard to the cause-title. In application No. 344 of 1996 the driver Shri Ved Prakash was impleaded as the sole applicant. In paragraph No. 1 of the application it was alleged that the applicant is the manager of M/s. Diamond Transport Service. He is not. Shri G.L. Sharma is the manager. Later Shri Yusuf Khan was impleaded as applicant No. 2. Thus the back seat driving was being done by Shri G.L. Sharma whose name appeared in the cause title but who was not impleaded as the main applicant. Similar was the case in application No. 343 of 1996, wherein Shri Ranjeet Singh was shown as the sole applicant and Rajesh Poppet Lal Shah was later impleaded as the applicant No. 2. 18.. The learned counsel for the department, Shri N.K. Baid, has placed his reliance on the decision in Gill Sandhu Haryana Transport Co. v. State [1991] 10 RTJS 335, wherein the penalty was imposed upon the transporter who failed to give correct particulars about the consignor and the consignee. It was further held that such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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